Main Macro Events This Week

Trading volumes should remain in holiday trading mode for Boxing Day (U.K. Bank Holiday today), and New Year’s market closures on Friday.

• United States: The U.S. economic calendar this week includes the Advance November trade report on goods (Tuesday), which will provide key insight for the trade report that’s out on January 6. Analyst are forecasting a widening in the deficit to -$607 bln, from -$58.4 bln previously. Exports are forecast remaining weak given the slowdown in global activity in and the strength in the USD .Consumer confidence for December (Tuesday) is seen jumping to 94.0 after sliding 8.7 points to 90.4 in November, with the latter the weakest print since September 2014. The December Dallas Fed manufacturing survey (Monday) is estimated falling back to -8.0 from -4.9, reflecti ng the ongoing oil recession. The index has been in negative territory for 11 straight months. On the other hand, the December Chicago PMI (Thursday) should bounce back to 51.0 after diving 7.5 points to 48.7 in November. The October Case Shiller home price index (Tuesday) is forecast falling back to 182.4 from 182.9. It’s been on a rising trend since the start of the year. Weekly jobless claims (Thursday) and November pending home sales report (Wednesday) round out the short holiday week. The first trading week of 2016 will be lively with the December jobs report, various ISMs, and vehicle sales. But with the Fed out of the way and no additional rate action anticipated until March at the earliest, the data won’t impact as usual. There are no Fed speakers this week. The next Fed meeting is not until January 26, 27. The FOMC is widely expected to pause to monitor the effects of its December hike.

• Canada: The calendar is uneventful for the final week of 2015, with nothing on the economic data scheduled and a blank schedule for the Bank of Canada. Markets are closed on Monday (Dec 28) for boxing day and also shut on Friday for New Year’s Day. The next top tier event from the Bank of Canada is a speech from Governor Poloz on January 7th. Moreover, the calendar is very busy next week, with November IPPI, November Trade, December Ivey PMI and December employment scheduled for release.

• Japan: November industrial production (Monday) is expected unchanged at 1.4% y/y. November retail sales (Monday) are seen up 2.5% y/y from the 2.9% October outcome for large retailers, and up 1.5% y/y from 1.8% in total.

• China: November leading indicators are due early in the week. The official manufacturing PMI is slated for Friday. It’s been in contractionary territory below 50 since August, highlighting the slowing in the sector.

• Europe: Trade will be shortened in another holiday week with Germany already effectively closing down on New Year’s eve on Thursday. The only data release of note is Eurozone M3, which long since has been demoted in the ECB’s monetary policy setting considerations. Analyst are looking for a slight deceleration in the annual rate to 5.1% y/y (med same) from 5.3% y/y, but the focus will once again be on the counterparts and credit growth. This seems to be slowly picking up and in many cases, weak lending growth to companies is as much a matter of a lack of demand than a reflection of credit constraints. Even in Germany, where companies are experiencing the least problems obtaining credit, demand has been low, as the manufacturing sector is happy to use existing capacity to fulfill orders, rather than embarking on ambitious investment projects. The calendar also has Italian producer price inflation for November and an Italian bond sale on Wednesday, but trading is likely to be very quiet between the holidays.

Janne Muta

Chief Market Analyst

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